Frequently Asked Questions
Q: Can I borrow money from an Australian bank to purchase an investment property?
A: Finance is readily available to you by Australian banks and lending institutions at the same rate and on the same terms as Australian investors.
Q: Can I buy Property in Australia?
A: Yes, you can. Broadly speaking, foreign investors can buy residential real estate, which is:
1.) "Off plan" i.e., designed and approved by the relevant planning authority, (usually the local council or shire authority), where construction has not yet commenced.
2.) Under construction, but not yet completed
3.) Completed, but not yet lived in. Note: Once they have been lived in by a tenant, or owner, they cannot be legally sold to an "off shore" buyer.
Q: Can I purchase an investment property from my country or do I need to fly over to Australia?
A: Yes you can purchase a property from overseas; many clients including overseas investors leave it to us to select their properties. This works very well and there has never been any problems. If you choose to fly out to inspect the properties, check out our special offers. We can organise flights, accommodations, transport, entertainment, etc. The next step is to let us know your expected arrival date and itinerary.
Q: Do I pay tax on my investment property’s rental income?
A: Yes. As you earn income in Australia, you are subject to the taxation laws of this country. You also receive taxation benefits against that income because you are providing accommodation for tenants.
Q: How do I transfer money from my country to Australia?
A: There are banks that specialize in transferring money around the world. If you are intending to purchase a property with overseas capital you will be, quite rightly, looking for savings. Foreign Payments offer Telegraphic Transfers and foreign drafts at individually negotiated rates and their charges are some of the most competitive in the industry. Their advisers will help you through every stage of your foreign exchange needs from sending you daily exchange rates (by e-mail), to supplying you with commission free currency for all your overseas travel.
Q: How many properties can I buy?
A: As many as you wish.
Q: How much deposit will I need and are there any other fees?
A: If you are buying outright without a loan i.e. paying cash, a 20% to 40% deposit is required plus legal, stamp duty, loan, and purchasing costs which equate to about 6% of the property price.
So if a property is $300,000 then add $18,000 to be safe and cover these acquisition costs. Incidentally, these same fees apply to an Australian citizen and vary from state to state.
Q: Is GST Payable on the purchase of an established residential property?
A: No, GST is not payable on the sale of an existing family home or when a private individual sells a property.
Q: I've been looking for a property for a long time, should I now wait before buying as prices seem to have recently gone down?
A: If you intend to be a property 'investor' as opposed to a property 'trader' you probably should not wait any longer. A 'trader' buys today, and sells very quickly for a profit. A 'investor' on the other hand, is buying for long term rental income, capital growth and tax benefits.
As long as you pay fair market price, which can easily be determined by the level of sales activity in the project you are considering, you should still achieve sound capital and rental growth over the long term.
Q: What is Negative gearing?
A: When the interest rate on the borrowed funds used to purchase an asset or make an investment is higher than the expected income yield on the investment, the practice is called negative gearing. The investor may be able to offset the loss against other taxable income.
Q: What Title is the Property held under?
A: Australian property is held under Freehold Title, which is very safe and secure. When properties have a body corporate, which means there is more than one eg. High rise building, this is referred to as Group Title Freehold.
Q: What type of property can I buy?
A: All Residential, some commercial & rural zoned land plus properties held under special title. Real Estate In Australia has a range of properties suitable for purchase by foreign investors.
Q: When do I need to pay the other fees?
A: In Queensland, all fees are held and attended to on settlement. So if you place a deposit on a property, you have little else to pay until 1 month after the property settles, which is your first loan payment on monies borrowed. You can discuss this with our recommended lending representative.
Q: When is it appropriate to invest in property?
A: Property investment has always been a popular form of investment. In fact, historically, investing in property has delivered good returns above inflation. An investment in property is an excellent way of protecting the value of your savings against inflation because it can return capital growth over the long term.